Researchers: Just one "whale" raised bitcoin to $20K in 2017

Researchers from the universities of Texas and Ohio state that the rise in the price of bitcoin in 2017 to 20'000 dollars was caused by manipulation from just one bitcoin address.

Bloomberg writes that John M. Griffin and Amin Shams updated their previous study, which stated that the reason for the movement of bitcoin to the historical led to misconduct in the market.

Griffin and Shams ' analysis, first published in a research paper in June 2018, showed that blockchain transaction models suggest that Tether was used to provide price support and manipulate the bitcoin market:

Purchases with Tether are designed for periods of recession in the market and led to a significant increase in the price of bitcoin. This flow of purchase orders refers to one organization whose clusters below round prices cause asymmetric autocorrelations in the price of bitcoin, as evidenced by the insufficient reserves of Tether.

Instead of pointing to investor demand for cash, the researchers also argued that a buyout bid for nonexistent reserves had been claimed. This is also consistent with "the hypothesis based on the suggestion that the unsecured, digital money inflate the price of the cryptocurrency".

In addition to their previous research, the scientists are reinforcing their arguments, which will officially be published in a forthcoming peer-reviewed article for the Journal of Finance.

Griffin and Shams argue that analysis of tether and Bitcoin transactions from March 1, 2017 to March 31, 2018 confirms their view that one person or a cohesive group of people is behind the manipulation, carrying out transactions through tether's subsidiary, the Bitfinex crypto exchange:

This pattern of actions, managed by one major account holder and not observed by other exchanges, is only present in the periods immediately following the issuance of new tether tokens.


Simulations show that these models are extremely unlikely due to randomness. This one major player or organization either demonstrated clairvoyance in the market or exerted an extremely large influence on the price of bitcoin.

Tether's General counsel Stuart Hegner dismissed the analysts 'claims, issuing a statement saying their research is "fundamentally flawed" and "comes from an insufficient data set."

In his rebuttal, Hegner also claims that the study was motivated to support a "parasitic lawsuit" against Tether, Bitfinex and the latter's operator, iFinex.

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